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Elizabeth Weintraub
How to Keep a Home on the Market in Sacramento After Offer Acceptance
I am finding that overall, many buyers are not very committed in our Sacramento real estate market. That’s a good reason to keep the home on the market after going into contract. Part of the reluctance to commit, I’m supposing, comes from the fact they feel pressured with multiple offers happening on such a large number of homes, and it’s frustrating that they have very few homes from which to choose. This is a scary market for first-time home buyers. We’ve never had a market like this in my lifetime before in Sacramento.
We have low prices but they are moving upwards quickly in some neighborhoods. Interest rates are historically low, around 3.75%, which is just incredible. A buyer’s purchasing power is immense. They can buy twice the home for half the money today, as compared to 7 years ago. But they have also witnessed first-hand the crash of the real estate market, and some of them feel very uncomfortable navigating in unchartered waters. It’s not unusual to go into escrow one day and then have the buyer cancel the next. This is why you want to keep the home on the market if at all possible without immediately jumping into pending status.
Home sellers in Land Park had this happen to them a while back. They negotiated in good faith an agreed-upon sales price and were relieved and thrilled that their home was sold. But, the following day, the buyers bailed. They didn’t give a good reason. See, that’s the thing, in California, a buyer can pretty much cancel a contract for any reason within the inspection period which, by default, is 17 days.
The next time we received an offer, the sellers were more cautious. The buyers wrote a clean offer, but until they removed the contingencies, the buyers could easily cancel. Their agent wrote an addendum containing verbiage about cancellation that was already preprinted in the purchase contract, and that’s part of what made the sellers worry. Agents don’t always think about how their addendums will be perceived by the sellers when they are trying to appease the buyers. But if the buyers require reassurance about cancellation rights, this makes the sellers understandably nervous. So, the purpose of the addendum backfired.
How to fix it was my quandary. Part of the solution was to keep the home on the market in active status. Once a seller takes a home off the market and then puts it back on the market, buyers begin to wonder what is wrong with the home. Why didn’t the buyers want to buy it? Did they uncover something horrible about the home? Is there a structural defect? When the truth is half the time “back on market” status is just due to flakey buyers: you’ve got the blind leading the blind. It’s much better to keep the home on the market for a while.
In a seller’s market, removing a home from the market takes it out of inventory, and it’s difficult to drum up enthusiasm for the home if it goes back. Especially in a seller’s market, it is much better for the seller to leave the home on the market in active status. However, a Sacramento real estate agent must present a true picture in advertising. This means we have to tell buyers that we have an offer. I accomplished that by adding a Pending Rescission modifier to the active status. In the confidential agent remarks, I suggested that agents write a back-up offer subject to the cancellation of the existing offer.
The sellers received a back-up offer, too. That’s because everybody wants something that somebody else wants. That’s a true principle that applies to real estate.
The sellers countered the buyers that they would leave the home on the market and remove it once the buyers had removed their contingencies. This way, everybody won, and the sellers felt more agreeable to accepting the offer.
If you’re looking for an experienced Sacramento real estate agent who puts her clients’ needs first and foremost, call Elizabeth Weintraub at 916.233.6759.
Bank Pricing for Short Sales and Foreclosures
Some real estate agents wrongly believe that the price doesn’t matter in a short sale. Buyers might have adopted that attitude from their agents or perhaps they just plucked it out of thin air, but I doubt it. They tend to confuse short sales with foreclosures and bank-owned homes. My favorite is when I hear that all banks are desperate. Maybe it’s the get-rich-quick-schemes they read about that makes them so eager to believe something so wrong.
You think those guys bidding on the courthouse steps at trustee’s auctions are picking up tons of property way under market value? Market value means what the market will bear — the price a seller is willing to sell for and a buyer is willing to pay, which is generally substantiated by comparable sales. Flippers get a little bit of a discount for buying the home without guarantees and sometimes without inspections, because there is an inherent risk. They feel it’s a calculated risk. Some homes they flip for higher profit margins than others. Some require less work. But it’s not as easy as buying a home one day and turning around the next to make $100K on the deal. They generally must improve the home.
Your best deals are probably made behind closed doors at the bank. These are the bank-owned homes that the banks bundle in a bulk package and sell the entire package at one lump sum to investors. But they’re not going to make the same deal on one little house just for you and just because you asked. Not gonna happen.
Moreover, it’s not gonna happen on a short sale because the bank doesn’t own the home. The bank is simply considering allowing the home to sell at market value because they would get the same amount if it went to foreclosure. There is not a lot of incentive for a bank to authorize a short sale if the price isn’t right.
Sellers know this. Especially Sacramento short sale sellers who work with Elizabeth Weintraub, because I tell them. Every Sacramento short sale agent knows this. The bank wants market value. End of story. There is no point in submitting a lowball offer, working through 2 to 3 months of paperwork submissions only to be denied at the end because the buyer won’t move on price. Just say no to start with and get on with the short sale.
Some buyer’s agents get upset and accuse me of not working for the buyer. That’s right. When I am the listing agent, I don’t work for the buyer. I work for the seller.
Why It’s a Bad Idea to Be a For Sale By Owner — FSBO — in Sacramento
Although I have done it myself in the past — back when I was young and foolish with not nearly as many wrinkles as I have today — I still don’t advise it. I’m not saying this because I am a Sacramento real estate agent. I’m promoting this because I’ve been in the business long enough to know how many small things that can mushroom into big things can go wrong in a real estate transaction and, for that reason alone, you need a real estate agent. It’s just not a good idea to try to sell your home yourself as a FSBO (for sale by owner).
A seller in the Elk Grove area called me yesterday. He asked if I recalled our meeting in my midtown office 3 weeks ago. He had been interviewing Elk Grove agents to sell his home in the Elk Grove area. I sell a lot of homes in Elk Grove and Laguna, primarily because that’s where many homes are for sale and these neighborhoods are in high demand right now.
I did remember meeting him. In fact, before our meeting, I had emailed him a CMA for his home. We spent a good hour at my office going over the plat map, the county records, discussing how he needed to bring some technical aspects up-to-date, pouring over the comparable sales, explaining how to adjust the comps by adding / subtracting for improvements and variations. I also gave him a range of price in which I felt his home would sell, but cautioned that it may sell for more than our asking price in this seller’s market. It’s hard to predict exactly what a desperate buyer might do.
The reason that he called was to tell me out of all the agents he interviewed, he felt I was best suited for him and the most professional. However, and yes, there was that little BUT in his voice, he has decided to sell to his tenant and he is selling the home himself as a for sale by owner. I had done such a great job presenting what I would do and how I would do it, that I made it look too easy. This guy somehow believes he could do it himself.
He probably can sell it himself, but will it close at the sales price? Did he get the highest sales price he could possibly get in this market? Was his home exposed to the largest pool of buyers to get him the highest price? What will he do if the underwriter throws out the buyer’s loan at the 11th hour? How will he handle technical title issues that affect his land? What comparable sales will he give to the appraiser to assist the appraiser in determining value should the present comps fail to support him? How will he handle the home inspection? Will he fill out the disclosures correctly, and does he have a list of every disclosure the seller needs to provide?
He thinks he will walk out of this transaction with a big chunk of change. Money that he would like me to help him to invest in fixers. Although, he has no experience buying fixers to flip, and there are very few opportunities in Sacramento at the moment. He doesn’t strike me as a flipper. But he also didn’t strike me as a person who would try to sell his home by himself. The main reason to try to do that is to try to save commission, but in his case, he is probably losing more money than the commission would have cost him.
He asked me about the FIRPTA. How should he fill it out?
Really? He’ s got to ask himself that question, not a person who does not represent him. If he wants to be his own real estate agent and represent himself, he’s got to pull himself up by his bootstraps and get with the program.
A Sacramento Lockbox Experience Shed Light on a Bad Agent
When I first moved to Sacramento in 2002, I did not yet belong to MLS. I had not yet reactivated my real estate license because it involved passing the California real estate exam again. The real estate laws in California changed over the past 12 years or so since I had left the state, so it took me a few months to choose an office, take the exam and become an official Sacramento real estate agent who has access to MLS as a member of MetroList.
As a member of MetroList, I also get to buy my own Sacramento lockboxes and secure them to homes that I list, so other agents can gain access if the sellers aren’t home. Lockboxes come in handy for appraisers and after the sellers move out, when the buyers conduct a final walkthrough. It’s very difficult to get into a Sacramento lockbox if you don’t have an display key. The good thing about the infrared communication device on the lockbox is it sends the agent’s information to a website. I check this website every night before I turn off my computer to join my husband for dinner.
The website tells me the name of the agent who used the lockbox, the time and the day, the agent’s telephone number, the agent’s email address and the name of the agent’s broker. It’s also a useful list in case somebody left the lights on by mistake, I can track down the last person to show and ask them to be more prudent in the future. I also email all buyer’s agents who showed my listings that day to ask for feedback and thank them for showing.
When I bought my home in Sacramento, the previous listing agent left the lockbox on the railing and I couldn’t get it off. He never came back to pick it up. I don’t know if it was because he did not want to run into me again or if he simply forgot. I would be mortified if I forgot to pick up a lockbox. Not only that, but lockboxes cost around $100, and I own about $8,000 worth of lockboxes. To get a lockbox off, I had to resort to a reciprocating saw. It took me a good 20 minutes of teeth rattling to saw through the shackle.
It’s much easier to use a display key to open the lockbox. I could have called my own agent to come over and use her display key, but she had done such a lousy job during my escrow. I did not want to ever speak to her again. I vowed I would never do what she did to my own clients. She felt that my husband was her client and forgot all about me. She did not return my phone calls or emails. She never answered her cellphone when I called. We almost did not close escrow because she messed up so badly. As I sawed through the shackle on that lockbox, I thought about her, and how grateful I am that I will never be like her.
In addition to my heros and heroines, whom I admire and aspire to mirror, the bad ones also teach me the paths to avoid, what not to do.
How Much Commission Does a Sacramento Real Estate Agent Charge?
How much is your commission? That’s not what I want to hear when I answer my phone. There is no, Hello, Elizabeth, how are you? None of that pleasantry. Not even an introduction, My name is David Stupido and I want to sell my house. Nope, some of these potential sellers act like they are calling Target to inquire about the price of milk in aisle 3. Except they would be more polite if they were calling Target.
You know who is to blame for this attitude? Not the public. The guilty culprits are real estate agents and our trade associations, including the newly formed Bureau of Real Estate in California. Everybody is so busy bending over backwards trying to protect the consumer by informing the consumer that commissions are negotiable, that it’s become too big of a deal. We have turned commissions into the center focus. When it is the sole identifier as to why a seller would pick an agent, we have a problem, Houston.
What is says about the real estate profession is that all agents are identical. We’re all the same. There is no difference among real estate agents.
All of which is completely untrue.
What a seller really needs to know is what will her real estate agent do for her? How will she market her home? What factors will she use to determine price? How can she be assured she will get the highest price she deserves to receive? How long has the agent been in business — does the agent have recommendations / reviews from satisfied clients?
A really good agent doesn’t cost a thing. A really good Sacramento real estate agent does such a superior job you would pay her more than the commission she charges. A difference of a point or two in commission doesn’t mean a thing when you’re taken to the cleaners by an agent who does a poor job. Don’t be penny wise and pound foolish. If you want a discount agent, don’t call a full-service agent and expect full service. Even Target won’t give you a discount on milk.
